Quote Of The Week: U.S. Households Ready To Spend

Trillions of dollars of stimulus cash have been pumped into the economy. What exactly do people do with the money once they get it? Research suggests they tend to spend about one-third of the funds, saving the rest or using it to pay down debt. (Check out our previous article: How Did Americans Spend Their Stimulus Checks? You May Be Surprised To Learn)

Lower income families are more likely to use the stimulus cash to pay down expensive debt and improve their financial position. Jon Hilsenrath of The Wall Street Journal comments on the impact of stimulus funds on U.S. consumers:

“Households have entered 2021 armed with boatloads of cash—on average—and the cleanest balance sheets they have had in decades. Households finished 2020 with $14.1 trillion combined in checking and savings accounts, compared with $11.4 trillion in 2019, according to Federal Reserve data. Their debt-service burden—the percentage of after-tax income used to pay off debt—fell to its lowest level in records going back to the early 1980s. This is a much different story than was the case when the U.S. was coming out of recession in 2009.”

Jon Hilsenrath, “Stimulus Checks Have Left U.S. Households Ready to Spend,” The Wall Street Journal, March 21, 2021

 

About Mari Adam

Mari Adam, Certified Financial Planner™ has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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